Problem 24-3A (Part Level Submission) Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials $%49,600 $48,500 $1,100 Favorable Direct labor Indirect materials 27,280 27,580 300 Unfavorable Indirect labor Utilities Maintenance 57,040 54,040 3,000 Favorable 22,320 21,910 410 Favorable 15,500 15,390 110 Favorable 7,440 7,630 190 Unfavorable Total variable 179,180_175,050 4,130 Favorable Fixed costs Rent Supervision Depreciation 11,500 11,500 -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable 0- Neither Favorable nor Unfavorable 35,700 35,700 -0 Neither Favorable nor Unfavorable 17,100 17,100 7,100 7,100 Total fixed Total costs $214,880 $210,750 $4,130 Favorable The monthly budget amounts in the report were based on an expected production of 62,000 units per month or 744,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 60,000 units were produced